EUR/NZD Back to 1.66?

Despite a sharp rise in U.S. yields and the U.S. dollar today, euro held up fairly well because the ECB has made their monetary policy plans very clear. They expect to make an announcement on reducing bond purchases next month, kicking off a gradual phase on policy normalization. Until that day approaches, the euro should remain bid as long as European officials don’t attempt to talk it down.
Meanwhile with only a few more days to go before this weekend’s election, the polls in New Zealand are too close to call and that should be a problem for the New Zealand dollar. The economy is struggling under the weight of a strong currency and with no immediate plans to raise interest rates, the New Zealand dollar should underperform as investors reduce positions ahead of the election. The RBNZ’s cautious outlook also casts a dark cloud on the currency.

Technically today’s rally has taken EUR/NZD to the 20-day SMA. There are still lower highs and lowers but if the currency pair manages to rise above 1.6525, which would also be above the 50% Fib retracement of the April 2015 to August 2015 rally, then the next stop should be 1.66.